Nigel S., Chambers S., Johnson R. Operations Management
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There are hundreds of books on project management. They
range from the introductory to the very detailed and
from the managerial to the highly mathematical. Here are
two general (as opposed to mathematical) books which
are worth looking at.
Maylor, H. (2003) Project Management, 3rd edn, Financial
Times Prentice Hall, Harlow.
Newton, R. (2005) Project Manager: Mastering the Art of
Delivery in Project Management, Financial Times Prentice
Hall, Harlow.
Selected further reading
http://apm.org.uk The UK Association for Project Manage-
ment. Contains a description of what professionals consider
to be the body of knowledge of project management.
http://pmi.org The Project Management Institute’s home
page. An American association for professionals. Insights
into professional practice.
http://ipma.ch The International Project Management
Association, based in Zurich. Some definitions and links.
www.comp.glam.ac.uk/pages/staff/dwfarth/projman.htm#
automated A great site with lots of interesting stuff on soft-
ware, project management and related issues, but also very
good for general project management.
Useful web sites
Now that you have finished reading this chapter, why not visit MyOMLab at
www.myomlab.com where you’ll find more learning resources to help you
make the most of your studies and get a better grade?
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Introduction
Quality is the only one of the five ‘operations performance
criteria’ to have its own dedicated chapter in this book. There
are two reasons for this. First, in some organizations a separate
function is devoted exclusively to the management of quality.
Second, quality is a key concern of almost all organizations.
High-quality goods and services can give an organization a
considerable competitive edge. Good quality reduces the costs
of rework, waste, complaints and returns and, most importantly,
generates satisfied customers. Some operations managers
believe that, in the long run, quality is the most important
single factor affecting an organization’s performance relative
to its competitors.
Chapter 17
Quality management
Key questions
➤ What is quality and why is it so
important?
➤ How can quality problems be
diagnosed?
➤ What steps lead towards
conformance to specification?
➤ What is total quality management
(TQM)?
Figure 17.1 This chapter covers quality management
Check and improve your understanding of this chapter using self assessment
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eBook – all at www.myomlab.com.
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The first Four Seasons Hotel opened over 45 years ago.
Since then the company has grown to 81 properties
in 34 countries. Famed for its quality of service, the
hotel group has won countless awards including the
prestigious Zagat survey and numerous AAA Five
Diamond Awards, and it is also one of only
14 organizations that have been on the Fortune magazine’s
list of ‘100 Best Companies to Work For’ every year
since it launched in 1998, thus ranking as ‘top hotel
chain’ internationally. From its inception the group has
had the same guiding principle, ‘to make the quality of
our service our competitive advantage’. The company
has what it calls its Golden Rule: ‘Do to others (guests
and staff) as you would wish others to do to you.’ It is
a simple rule, but it guides the whole organization’s
approach to quality.
‘Quality service is our distinguishing edge and the
company continues to evolve in that direction. We are
always looking for better, more creative and innovative
ways of serving our guests’, says Michael Purtill, the
General Manager of the Four Seasons Hotel Canary
Wharf in London. ‘We have recently refined all of our
operating standards across the company, enabling us to
further enhance the personalized, intuitive service that all
our guests receive. All employees are empowered to use
their creativity and judgement in delivering exceptional
service and making their own decisions to enhance our
guests’ stay. For example, one morning an employee
noticed that a guest had a flat tyre on their car and
decided of his own accord to change it for them, which
was very much appreciated by the guest.
The golden rule means that we treat our employees
with dignity, respect and appreciation. This approach
encourages them to be equally sensitive to our guests’
needs and offer sincere and genuine service that exceeds
expectations. Just recently one of our employees
accompanied a guest to the hospital and stayed there
with him for the entire afternoon. He wanted to ensure
that the guest wasn’t alone and was given the medical
attention he needed. The following day that same
employee took the initiative to return to the hospital
(even though it was his day off) to visit and made sure
that that guest’s family in America was kept informed
about his progress. We ensure that we have an ongoing
focus on recognizing these successes and publicly praise
and celebrate all individuals who deliver these warm,
spontaneous, thoughtful touches.
At Four Seasons we believe that our greatest asset
and strength is our people. We pay a great deal of
attention to selecting the right people with an attitude that
takes great pride in delivering exceptional service. We
know that motivated and happy employees are essential
to our service culture and are committed to developing
our employees to their highest potential. Our extensive
training programmes and career development plans are
designed with care and attention to support
the individual needs of our employees as well as
operational and business demands. In conjunction with
traditional classroom-based learning, we offer tailor-made
internet-based learning featuring exceptional quality
courses for all levels of employee. Such importance is
given to learning and development that the hotel has
created two specialized rooms, designated for learning
and development. One is intended for group learning and
the other is equipped with private computer stations for
internet-based individual learning. There is also a library
equipped with a broad variety of hospitality-related
books, CDs and DVDs that can be taken home at any
time. This encourages our employees to learn and
develop at an individual pace. This is very motivating
for our employees and in the same instance their
development is invaluable to the growth of our company.
Career-wise, the sky is the limit and our goal is to build
lifelong, international careers with Four Seasons.
Our objective is to exceed guest expectations and
feedback from our guests and our employees is an
invaluable barometer of our performance. We have
created an in-house database that is used to record all
guest feedback (whether positive or negative). We also
use an online guest survey and guest comment cards
which are all personally responded to and analysed to
Operations in practice Quality at the Four Seasons
Canary Wharf
1
Source: Four Seasons Hotels, Photographer Robert Miller
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identify any potential service gaps. We continue to focus
on delivering individual personalized experiences and our
Guest History database remains vital in helping us to
achieve this. All preferences and specific comments
about service experience are logged on the database.
Every comment and every preference is discussed and
planned for, for every guest, for every visit. It is our
culture that sets Four Seasons apart: the drive to deliver
the best service in the industry that keeps our guests
returning again and again.’
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What is quality and why is it so important?
It is worth revisiting some of the arguments which were presented in Chapter 2 regarding the
benefits of high quality. This will explain why quality is seen as being so important by most
operations. Figure 17.2 illustrates the various ways in which quality improvements can affect
other aspects of operations performance. Revenues can be increased by better sales and
enhanced prices in the market. At the same time, costs can be brought down by improved
efficiencies, productivity and the use of capital. So, a key task of the operations function must
be to ensure that it provides quality goods and services, to both its internal and external
customers.
Figure 17.2 Higher quality has a beneficial effect on both revenues and costs
Source: Based on Gummerson, E. (1993)
2
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The operation’s view of quality
There are many definitions of quality; here we define it as ‘consistent conformance to customers’
expectations’.
The use of the word ‘conformance’ implies that there is a need to meet a clear specification.
Ensuring a product or service conforms to specification is a key operations task. ‘Consistent’
implies that conformance to specification is not an ad hoc event but that the product or
service meets the specification because quality requirements are used to design and run the
processes that produce products and services. The use of ‘customers’ expectations’ recognizes
that the product or service must take the views of customers into account, which may be
influenced by price. Also note the use of the word ‘expectations’ in this definition, rather
than ‘needs’ or ‘wants’.
Customers’ view of quality
Past experiences, individual knowledge and history will all shape customers’ expectations.
Furthermore, customers may each perceive a product or service in different ways. One person
may perceive a long-haul flight as an exciting part of a holiday; the person on the next seat may
see it as a necessary chore to get to a business meeting. So quality needs to be understood
from a customer’s point of view because, to the customer, the quality of a particular product
or service is whatever he or she perceives it to be. If the passengers on a skiing charter flight
perceive it to be of good quality, despite long queues at check-in or cramped seating and poor
meals, then the flight really is of good perceived quality.
3
Also customers may be unable to
judge the ‘technical’ specification of the service or product and so use surrogate measures
as a basis for their perception of quality.
4
For example, a customer may find it difficult to
judge the technical quality of dental treatment, except insofar as it does not give any more
trouble. The customer may therefore perceive quality in terms the attire and demeanour of
the dentist and technician, décor of the surgery, and how they were treated.
Reconciling the operation’s and the customer’s views of quality
The operation’s view of quality is concerned with trying to meet customer expectations.
The customer’s view of quality is what he or she perceives the product or service to be. To
create a unified view, quality can be defined as the degree of fit between customers’ expecta-
tions and customer perception of the product or service.
5
Using this idea allows us to see
the customers’ view of quality of (and, therefore, satisfaction with) the product or service
as the result of the customers comparing their expectations of the product or service with
There are many
definitions of quality
Customer expectations
Customer perception
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Figure 17.3 Perceived quality is governed by the magnitude and direction of the gap
between customers’ expectations and their perceptions of the product or service
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their perception of how it performs. This is not always straightforward; see the short case
‘Tea and Sympathy’. Also, if the product or service experience was better than expected then
the customer is satisfied and quality is perceived to be high. If the product or service was less
than his or her expectations then quality is low and the customer may be dissatisfied. If the
product or service matches expectations then the perceived quality of the product or service
is seen to be acceptable. These relationships are summarized in Figure 17.3.
Both customers’ expectations and perceptions are influenced by a number of factors,
some of which cannot be controlled by the operation and some of which, to a certain extent,
can be managed. Figure 17.4 shows some of the factors that will influence the gap between
expectations and perceptions. This model of customer-perceived quality can help us under-
stand how operations can manage quality and identifies some of the problems in so doing.
The bottom part of the diagram represents the operation’s ‘domain’ of quality and the top
part the customer’s ‘domain’. These two domains meet in the actual product or service, which
is provided by the organization and experienced by the customer. Within the operation’s
domain, management is responsible for designing the product or service and providing a
specification of the quality to which the product or service has to be created. Within the
customer’s domain, his or her expectations are shaped by such factors as previous experi-
ences with the particular product or service, the marketing image provided by the organization
and word-of-mouth information from other users. These expectations are internalized as a
set of quality characteristics.
A customer’s view of
quality is shaped by the
gap between perception
and expectation
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499
Defining quality in terms of perception and expectation
can sometimes reveal some surprising results. For
example, Tea and Sympathy is a British restaurant and
café in the heart of New York’s West Village. Over the last
ten years it has become a fashionable landmark in a city
with one of the broadest range of restaurants in the world.
Yet it is tiny, around a dozen tables packed into an area
little bigger than the average British sitting room. Not
only expatriate Brits but also native New Yorkers and
celebrities queue to get in. As the only British restaurant
in New York, it has a novelty factor, but also it has
become famous for the unusual nature of its service.
‘Everyone is treated in the same way’, says Nicky Perry,
one of the two ex-Londoners who run it, ‘We have a firm
policy that we don’t take any shit.’ This robust attitude
to the treatment of customers is reinforced by ‘Nicky’s
Rules’ which are printed on the menu.
1 Be pleasant to the waitresses – remember Tea and
Sympathy girls are always right.
2 You will have to wait outside the restaurant until your
entire party is present – no exceptions.
3 Occasionally, you may be asked to change tables so
that we can accommodate all of you.
4 If we don’t need the table you may stay all day, but if
people are waiting it’s time to naff off.
Short case
Tea and Sympathy
6
5 These rules are strictly enforced. Any argument will
incur Nicky’s wrath. You have been warned.
Most of the waitresses are also British and enforce
Nicky’s Rules strictly. If customers object they are thrown
out. Nicky says that she has had to train ‘her girls’ to
toughen up. ‘I’ve taught them that when people cross
the line they can tear their throats out as far as I’m
concerned. What we’ve discovered over the years is
that if you are really sweet, people see it as a weakness.
People get thrown out of the restaurant about twice a
week and yet customers still queue for the genuine
shepherd’s pie, a real cup of tea, and of course the
service.’
Source: Corbis
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Figure 17.4 The customer’s domain and the operations domain in determining the perceived quality, showing how
the gap between customers’ expectations and their perception of a product or service could be explained by one
or more gaps elsewhere in the model
Source: Adapted from Parasuraman, A. et al. (1985) A conceptual model of service quality and implications for future research, Journal of
Marketing, vol. 49, Fall, pp. 41–50. Reproduced with permission from the American Marketing Association.
Magic Moments is a small, but successful wedding
photography business. Its owner, Richard Webber, has
seen plenty of changes over the last twenty years. ‘In the
past, my job involved taking a few photos during the
wedding ceremony and then formal group shots outside.
I was rarely at a wedding for more than two hours. Clients
would select around 30 photos to go in a standard
wedding album. It was important to get the photos right,
Short case
Quality at Magic Moments
Source: Alamy Images
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because that was really the only thing I was judged on.
Now it’s different. I usually spend all day at a wedding,
and sometimes late into the evening as well. This creates
a very different dynamic with the wedding party, as you’re
almost like another guest. Whilst the bride and groom are
still my primary concern, other guests at the wedding are
also important. The challenge is to find the right balance
between getting the best photos possible whilst being as
discreet as possible. I could spend hours getting the
perfect picture, but annoy everyone in the process. It’s
difficult, because clients judge you on both the technical
quality of your work and the way you interact with
everyone on the day. The product has changed too.
Clients receive a CD or memory stick with around
500 photos taken during the day. Also I can give them a
choice of 10 albums in different sizes, ranging from 30 to
100 photos. This year, I have started offering photo books
which allow a much greater level of customization and
have proved popular for younger couples. For the future,
I’m considering offering albums with wedding items such
as invitations, confetti and menus, and individual paintings
created from photographs. Obviously I would have to
outsource the paintings. I’m also going to upgrade our
web site, so wedding guests can order photos and related
products online. This will generate revenue and act as a
good marketing tool. My anxiety is that advertising this
additional service at the wedding will be seen as being too
commercial, even if it’s actually of benefit to guests.
One of the biggest problems for the business is
the high level of demand in the summer months.
Weekends in June, July and August are often booked
up two years in advance. One option is to take on
additional photographers during busy periods. However,
the best ones are busy themselves. The concern is that
the quality of the service I offer would deteriorate. A large
part of the business is about how one relates to clients
and that’s hard to replicate. Having been to so many
weddings, I often offer clients advice on various aspects
of their wedding, such as locations, bands, caterers and
florists. However, with development, wedding planning is
clearly an area that could be profitable to the business.
Of course, another option is to move beyond weddings
into other areas, such as school photos, birthdays,
celebrations, or studio work.’
Diagnosing quality problems
7
Figure 17.4 shows how quality problems can be diagnosed. If the perceived quality gap is
such that customers’ perceptions of the product or service fail to match their expectations of
it, then the reason (or reasons) must lie in other gaps elsewhere in the model as follows.
Gap 1: The customer’s specification–operation’s specification gap. Perceived quality could
be poor because there may be a mismatch between the organization’s own internal quality
specification and the specification which is expected by the customer. For example, a car
may be designed to need servicing every 10,000 kilometres but the customer may expect
15,000-kilometre service intervals.
Gap 2: The concept–specification gap. Perceived quality could be poor because there is a
mismatch between the product or service concept (see Chapter 5) and the way the organiza-
tion has specified quality internally. For example, the concept of a car might have been for
an inexpensive, energy-efficient means of transportation, but the inclusion of a climate con-
trol system may have both added to its cost and made it less energy-efficient.
Gap 3: The quality-specification–actual-quality gap. Perceived quality could be poor because
there is a mismatch between actual quality and the internal quality specification (often called
‘conformance to specification’). For example, the internal quality specification for a car may
be that the gap between its doors and body, when closed, must not exceed 7 mm. However,
because of inadequate equipment, the gap in reality is 9 mm.
Gap 4: The actual-quality–communicated-image gap. Perceived quality could be poor because
there is a gap between the organization’s external communications or market image and the
actual quality delivered to the customer. This may be because the marketing function has set
unachievable expectations or operations is not capable of the level of quality expected by the
customer. For example, an advertising campaign for an airline might show a cabin attendant
offering to replace a customer’s shirt on which food or drink has been spilt, whereas such a
service may not in fact be available should this happen.
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Conformance to specification
Conformance to specification means producing a product or providing a service to its design
specification. It is usually seen as the most important contribution that operations manage-
ment can make to the customer’s perception of quality. We shall examine how it can be
achieved in the remainder of this chapter by describing quality management as six sequential
steps. This chapter, and Chapters 18, 19 and 20, will deal with these steps.
Step 1 Define the quality characteristics of the product or service.
Step 2 Decide how to measure each quality characteristic.
Step 3 Set quality standards for each quality characteristic.
Step 4 Control quality against those standards.
Step 5 Find and correct causes of poor quality.
Step 6 Continue to make improvements.
Step 1 – Define the quality characteristics
Much of the ‘quality’ of a product or service will have been specified in its design. But not all
the design details are useful in controlling quality. For example, the design of a television may
specify that its outer cabinet is made with a particular veneer. Each television is not checked,
however, to make sure that the cabinet is indeed made from that particular veneer. Rather
it is the consequences of the design specification which are examined – the appearance of the
cabinet, for example. These consequences for quality planning and control of the design are
called the quality characteristics of the product or service. Table 17.1 shows a list of the
quality characteristics which are generally useful.
Table 17.1 Quality characteristics for a car, a bank loan and an air journey
Quality characteristic
Functionality – how well
the product or service
does its job
Appearance – the
sensory characteristics
of the product or service:
its aesthetic appeal,
look, feel, etc.
Reliability – the consistency
of the product’s or service’s
performance over time
Durability – the total useful
life of the product or service
Recovery – the ease with
which problems with the
product or service can
be resolved
Contact – the nature of
the person-to-person
contact which might
take place
Air journey (customer
transformation process)
Safety and duration of journey,
onboard meals and drinks, car
and hotel booking services
Décor and cleanliness of
aircraft, lounges and crew
Keeping to the published flight
times
Keeping up with trends in the
industry
Resolution of service failures
Knowledge, courtesy and
sensitivity of airline staff
Bank loan (information
transformation process)
Interest rate, terms and
conditions
Aesthetics of information,
web site, etc.
Keeping promises (implicit
and explicit)
Stability of terms and
conditions
Resolution of service
failures
Knowledge and courtesy of
branch and call centre staff
Car (material
transformation process)
Speed, acceleration,
fuel consumption, ride
quality, road-holding, etc.
Aesthetics, shape, finish,
door gaps, etc.
Mean time to failure
Useful life (with repair)
Ease of repair
Knowledge and courtesy
of sales staff
Quality characteristics
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Quality characteristics of the total package
Many services are a whole package of several elements, each of which will have its own
quality characteristics. Some aspects of quality may be influenced by two or more elements
within the total package. To understand the quality characteristics of the whole package
therefore it is necessary to understand the individual characteristics within and between each
element of the package. For example, Figure 17.5 shows some of the quality characteristics
for a web-based online grocery shopping service. To judge this service it is necessary to
consider the web site through which information is transmitted and orders are placed, the
products that are sold through the site and the delivery service that transports purchases to
the customer. Identifying where each characteristic of quality lies is useful because it is the
first step towards understanding which part of the total service should be given responsibility
for maintaining each aspect of quality.
Step 2 – Decide how to measure each characteristic
These characteristics must be defined in such a way as to enable them to be measured and
then controlled. This involves taking a very general quality characteristic such as ‘appearance’
and breaking it down, as far as one can, into its constituent elements. ‘Appearance’ is diffi-
cult to measure as such, but ‘colour match’, ‘surface finish’ and ‘number of visible scratches’
are all capable of being described in a more objective manner. They may even be quantifiable.
Other quality characteristics pose more difficulty. The ‘courtesy’ of airline staff, for example,
Chapter 17 Quality management
503
Figure 17.5 Some quality characteristics for an online grocery shopping service
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